Roth IRAs are a great way to build a nest egg for your retirement. If you’re already contributing to your company’s 401(k), adding a Roth IRA can give you added tax flexibility when you start withdrawing. Since you’ve already paid the taxes on the money you contribute, you can take money out tax-free, and that will help minimize taxes from your 401(k). (See also: Optimize Your IRA and 401(k))

That’s just one of the many benefits — here are seven surprising things you may not know about the Roth IRA.

You Can Take Your Money and Run

Retirement accounts have all kinds of rules and regulations, right? Well, the Roth IRA lets you take your money out whenever you want — with no penalties. Any investment gains are subject to different rules, but the money you put in is yours whenever you want it. So if you’re worried that you might need the money, worry not — unless your investment goes down, of course.

A Roth IRA Can Fund Your First Home

If you want to take out some of those investment earnings, you can do so one time. You’re allowed to take up to $10,000 of your earnings to put towards buying a home IF you’re a first-time homebuyer.

Dividends Aren’t Taxed

Any dividends you’re paid on a stock or security you own in a Roth IRA account aren't taxed. This is a HUGE deal if you own a dividend-paying stock for many years. It can add up to thousands and thousands of dollars that you won’t ever have to pay taxes on. Can’t beat that.

It's Not for Everyone

Not everyone can contribute to a Roth IRA. These rules change annually, but for 2012 if you’re single and make more than $125,000 or married (filing jointly) and make more than $183,000, then you can’t contribute.

You Can Contribute After January 31

You have until tax day (April 15) to contribute towards to the previous year’s limit. For example, you have until April 15 to contribute towards your 2011 limit of $5,000 (or $6,000 if you’re over 50).

Death Isn’t the End

If you or your spouse dies, he/she can combine the two Roth IRAs into one without any penalty.

You Can Pass It On

The money in a Roth IRA can be passed on to an heir without any kind of penalty. It’s a really good way to pass money down to someone else.

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I love the benefits of the Roth and my husband and myself each have one. We knew we *could* make a withdrawal from our account to put toward our house down payment, but we didn't want to. We knew that over the long haul, the money would serve us better in the Roth.

We were also fortunate to have a hefty down payment anyway. I think if we would be close to putting 20% down but needed an extra boost, we would take from the Roth to do so.

@Kacie: We went through the same thing: should we take some out of the Roth to put down a larger down payment? We decided not to and have since made a point of not touching it, but it's nice to know it's there in case anything happens.

Roth IRA's are a fantastic way to save without risking big penalty's. I'd like to contribute to this post. Here is a quote from my post titled "ROTH IRA Basics" on ROTH IRA's.
"You can use your spouse's compensation subtract what they contribute to their IRA to qualify to make contributions to your own Roth IRA."

This means ROTH IRAs can be shared between spouses. If you were unemployed for an amount of time during the year but your spouse was working you could utilize their income to contribute to your ROTH IRA.

Also, it is possible to get around the income limit for contributions by contributing to a non-deductible Traditional IRA (ie put already-taxed income into a Traditional IRA and do not try to deduct it on your tax return) and then roll that over to a Roth IRA - all you have to pay is the tax on any gains between the contribution and conversion. You should probably check with a tax lawyer regarding your particular situation in this case, though, I'm not one!